An Epicor White PaperImprove Scheduling,Production, and QualityUsing Cloud ERP

Improve Scheduling Production and Quality Using Cloud ERPBest Practices forDiscrete ManufacturersThese days, ERP systems are designed to manage many types of manufacturingmethods; but for this discussion, we will concentrate on discrete manufacturing,which is typically used for low-volume, job-based production. By way of contrast,inventory-based manufacturing is typically used for high-volume production. Table1 summarizes the process steps for both types of manufacturing.Inventory based manufacturingHansen notes that most of the process steps for inventory-based manufacturing(i.e., quoting, producing, and shipping), producing, and shipping, require simplychecking inventory, whether for raw materials, components, or finished goods.She outlines the manufacturing process steps as follows: Quoting a customer on a particular manufacturing job involves checking to seeif materials are available in inventory or whether they need to be ordered, whichmay affect both pricing and delivery times. An order will require a similar check of inventory, and may need materials to bepurchased for inventory. Once the materials are received, they must be enteredinto inventory before production can proceed. Once production begins, material is issued from inventory to be used inmanufacturing; as production proceeds, finished goods are placed back intoinventory. When production is complete, finished goods are taken from inventory to beshipped to the customer.Table 1: Comparison of Inventory-Based and Discrete ManufacturingProcess ingQuoting or OrderingMaintain items ininventory“Parts-on-the-fly“Purchasing forProductionReceive items toinventoryPurchase direct toinventoryIssue inventory toproductionReceive directly toproductionReceive productionoutput to inventoryAccurate work-inprogress (WIP)Ship from inventoryShip directly from WIPProductionShippingSource: Epicor Software Corporation2

Improve Scheduling Production and Quality Using Cloud ERPDiscrete manufacturing“Most of ourcustomers will usea mix of the twoapproaches. Epicoroffers both methods,which allows ourcustomers theflexibility to basethe method on theircurrent productionneeds.”Christine Hansen,product marketing managerEpicor Software CorporationAccording to Hansen, Epicor ERP is particularly suited to discrete manufacturingbecause of the reductions in work enabled by features of the software, including: Parts-on-the-fly: a feature of the Epicor system allows a company to estimate,accept an order, produce, and ship products without the need to consultinventory If material needs to be purchased for an order, it can be bought directlyinto inventory; the system makes the appropriate inventory transactionsautomatically. In addition, items on the purchase order are tagged with anassociated job number, eliminating the need for suppliers to tag materials Material purchased from suppliers can be received into production because thesystem has already tagged the material with the correct job number; productionis also notified of its receipt, saving additional time and eliminating potentialconfusion Finished goods can be shipped directly from work-in-progress (WIP), rather thanfrom inventoryManaging production processesMany companies struggle with the need to strike a balance between how productcosts are determined and how products are scheduled. Certain data is recordedregarding how a product is manufacturingd based on costs, such as: Labor costs associated with manufacturing the productMaterial costs to build the productOverhead or burden costs allocated with the productSubcontracting or outsourcing costs for components or sub-assemblies that areeventually incorporated in the finished productAgainst these product costs are those associated with scheduling production,which include: Production setup time, labor, and machine idle timeThe amount of time required to manufacturing the productOutsourcing or subcontracting lead times, if anyLead times for materials required for production so that they arrive just in timefor productionThe combination of these two manufacturing elements is called the method ofmanufacturing (MOM). In essence, the MOM is a manufacturing roadmap thatincludes the Bill of Materials (BOM) and the Bill of Operations (BOO).Figure 1, found on the next page, depicts the balance between thesemanufacturing elements, as well as the factors that comprise costing andscheduling.3

Improve Scheduling Production and Quality Using Cloud ERP“I can pull a mastermethod fromThe method of manufacturing is sometimes called the master method ofmanufacturing and is maintained by engineering, although all parts of theorganization concerned with the manufacturing processes should be able to use it.Figure 1: Method of Manufacturingengineering to makemy initial quotation,and then make anyoperational or stepchanges within thequote. This savesme the time tobuild a method ofmanufacturing fromscratch every time.”Christine Hansen,product marketing managerEpicor Software CorporationSource: Epicor Software CorporationUsing the method of manufacturingOne common use for the method of manufacturing is to make it easier toprepare a quotation for a product to be manufacturingd. The master method ofmanufacturing contains all the details associated with manufacturing a product, soit can be used as a template for similar products. The Epicor standard practice is tohave the system store the method of manufacturing in several repositories: withthe quotation, with the job, and within the master engineering repository.4

Improve Scheduling Production and Quality Using Cloud ERPFigure 2: Using the Method of ManufacturingSource: Epicor Software CorporationAnother use for the method of manufacturing is to provide a production historyfor a product, highlighting the differences between how the manufacturing of aproduct was planned and how it was actually produced.Because the method of manufacturing also stores the complete history of revisionsfor a product, it is possible to see changes as they occur within the entire lifecycleof a manufacturingd product. The history of changes for production providesvaluable insight into how engineering can improve a product’s manufacturabilityand gives production ways to increase the overall efficiency of operations.5

Improve Scheduling Production and Quality Using Cloud ERPTop Practices for a Top-PerformingProduction FloorHansen lists three areas where best practices help top-performing manufacturersconcentrate their efforts: Production planning and scheduling Production management QualityLet’s take a closer at look at these areas.Production planning and schedulingOne of the first steps in the production day is to plan what products need to beproduced to satisfy existing orders, and to schedule production for them. Topperforming manufacturers concentrate on four practices to maximize production: Define existing capacity for production. A realistic assessment ofproduction capacity includes factors such as the availability of machine time, theflexibility of the various types of machines for different tasks, and the availabilityof skilled labor within the organization. Improve accuracy of production scheduling. The master method ofmanufacturing provides a way for companies to continuously refine bothmanufacturing processes and the time allocated to them. For example, the loadtime (the amount of time it takes for production) could be stored for each joboperation, and recalled to improve scheduling accuracy for future quotations aswell as for production. Use technology to enhance production control. An accurate scheduleshould be available not only to those in production planning, but also to peopleon the shop floor who may be actively managing or producing product. An ERPsystem has these capabilities and is flexible enough to accommodate changes. Communicate the schedule to all stakeholders in the organization.The availability of schedules online means that anyone connected to themanufacturing process has accurate, up-to-date information to make goodproduction decisions.A compelling case for cloud deployed Epicor ERP is the ease with which clouddeployment makes key workflows available across the enterprise—and the globalsupply chain. Because nothing more than an Internet connected PC, tablet, orsmart phone is required, cloud deployment is the most effective way to bringaccessibility and integration to most organizations.“Maybe the schedule we laid out is perfect, but how often does it stay that way?”asks Hansen. “An ERP system can help to increase our overall manufacturingflexibility and efficiency. And with cloud deployment, everyone across theorganization—from procurement to sales to field services staff—are kept in theloop of any changes to critical delivery dates and schedules.”6

Improve Scheduling Production and Quality Using Cloud ERPProduction managementAnother area of focus for top manufacturers is the production managementprocess. Hansen identifies four tasks in the process: Execute the production plan according to the schedule established earlier. Theprocess should be the same whether it calls for a single day or a week’s worthof production. Manage changes in production in a proactive way to minimize the impact ofchanges on the overall schedule. Increase the visibility of the entire production process so that the productionschedule, materials management, current production operations, and quality areavailable to the organization. Close the finished job. Many manufacturers miss this opportunity to implementcontinuous process improvement. The ability to compare expected costs andlabor against actual results is critical to driving the organization toward moreefficient manufacturing processes.All these tasks are made easier by using a cloud deployed ERP system, especiallyone that provides an end-to-end of the manufacturing process. “The ability toupdate and refine your manufacturing methods will make them that much smarterfor the next job,” says Hansen. “Smarter, more efficient methods mean increasedprofitability.”QualityA final area where top-performing manufacturers excel is in maintaining qualitythroughout the production process. They do this by instilling quality principlesthroughout the organization: Tracking quality incidents in a systematic way on a regular basis, beginning withthe production floor Identifying the root cause of a quality problem so that quality issues can beavoided in the future Making quality in the production cycle an organizational objective“How powerful would it be if your customer service could communicate ananalysis of production quality for an order?” asks Hansen. “Not only buildinga quality product, but being able to quickly respond with evidence developsconfidence in your manufacturing capability and process.”7

Improve Scheduling Production and Quality Using Cloud ERPCloud Deployed Epicor ERP“Cloud deployed Epicor ERP is the ideal solution for companies looking totechnology to help them punch above their weight,” says Hansen. “It’s an endto-end solution delivered online from the cloud.” Epicor Express includes thefunctionality to manage the tasks of manufacturing (Figure 3): Production managementProduct managementMaterial managementFinancial managementCustomer relationship managementeCommerceThese features are delivered in an on-demand, subscription basis with fulldocumentation and “always on” support.Cloud deployed Epicor ERP users can also benefit from the business intelligencefeatures built into the system. Role-based dashboards, for example, deliverinformation about production processes and business functions appropriate tothe user’s role in the production process. Production workers can view currentmachine or process data in high detail, while business or production managers canget a condensed view of all the business and production tasks in the company.These features communicate manufacturing performance throughout theorganization and enable companies to continuously improve business processesand production methods.Figure 3: Epicor ERPeCommerceWeb SiteB2C or B2B Web StoreCustomer Relationship ManagementContact ManagementLead & Opportunity ManagementMarketing ManagementEstimate and Quote ManagementOrder ManagementProduction ManagementJob ManagementLean ProductionData CollectionQuality AssuranceSchedulingFinancial ManagementGeneral LedgerAccounts ReceivableAccounts PayableMulticurrencyPayrollProduct ManagementMaterial ManagementBill of MaterialsRoutingEngineering Change and Revision ControlProduct CostingDocument ManagementInventory ManagementPurchase ManagementShipping and ReceivingSupplier ManagementWarehouse ManagementOn-Demand Business ArchitectureWeb Browser and Smart Client AccessNext-generation Cloud Computing PlatformData Security and Business ContinuityBusiness Process ManagementBusiness IntelligenceRole-based DashboardsInformation TrackersComprehensive ReportingHigh Speed SearchCopyright 2014 Epicor Software Corporation or subsidiary or affiliate thereof. All rights reserved.Source: Epicor Software Corporation8

Improve Scheduling Production and Quality Using Cloud ERP“These technologiesmake it easier foran organizationof any size tomanage scheduling,production, andquality on theirproduction floor.”Christine Hansen,product marketing managerEpicor Software CorporationEpicor ERP was designed to enable small manufacturers to focus on their corebusiness rather than on managing an IT infrastructure. It lowers the traditionalbarriers to on premisess ERP systems with a minimal upfront cost and anaffordable ongoing investment.It allows companies to dedicate their IT resources to support their strategicobjectives, rather than having those employees focused on low value systemadministrative functions.Some companies have expressed concerns about the security of applications anddata stored in the cloud. However, Epicor ERP runs in a Tier III certified datacenter,with network intrusion prevention and application security. To ensure businesscontinuity, Epicor has built redundancy into their servers, storage and databases,with data stored in multiple physical datacenters.For more information on the specific details of Epicor Cloud deployed ERP, pleaserefer to the Epicor “Cloud Deployment Technical Q&A” document available fromany Epicor Solution consultant.Companies using discrete manufacturing can certainly benefit from these bestpractices combined with cloud technology. “Cloud deployed Epicor ERP takes fulladvantage of the resources available in the cloud,” Hansen concludes.9

About EpicorEpicor Software Corporation is a global leader delivering business softwaresolutions to the manufacturing, distribution, retail, and service industries. Withmore than 40 years of experience, Epicor has more than 20,000 customers in over150 countries. Epicor solutions enable companies to drive increased efficiency andimprove profitability. With a history of innovation, industry expertise and passionfor excellence, Epicor inspires customers to build lasting competitive advantage.Epicor provides the single point of accountability that local, regional, and globalbusinesses demand. For more information, visit us for more information on Epicor Products and Services 1.800.999.6995Corporate Office804 Las Cimas ParkwayAustin, TX 78746USAToll Free: 1.888.448.2636Direct: 1.512.328.2300Fax: 1.512.278.5590Latin America and CaribbeanBlvd. Antonio L. Rodriguez #1882 Int. 104Plaza Central, Col. Santa MariaMonterrey, Nuevo Leon, CP 64650MexicoPhone: 52.81.1551.7100Fax: [email protected], Middle East and AfricaNo. 1 The ArenaDownshire WayBracknell, Berkshire RG12 1PUUnited KingdomPhone: 44.1344.468468Fax: 44.1344.468010www.epicor.comAsia238A Thomson Road #23-06Novena Square Tower ASingapore 307684SingaporePhone: 65.6333.8121Fax: 65.6333.8131Australia and New ZealandSuite 2 Level 8,100 Pacific HighwayNorth Sydney, NSW 2060AustraliaPhone: 61.2.9927.6200Fax: 61.2.9927.6298This document is for informational purposes only and is subject to change without notice. This document and its contents, including the viewpoints, dates and functional content expressed herein are believed to be accurate as of its date of publication,September 2014. However, Epicor Software Corporation makes no guarantee, representations or warranties with regard to the enclosed information and specifically disclaims any applicable implied warranties, such as for fitness for a particular purpose,merchantability, satisfactory quality, and reasonable skill and care. As each user of Epicor software is likely to be unique in their requirements in the use of such software and their business processes, users of this document are always advised todiscuss the content of this document with their Epicor account manager. All information contained herein is subject to change without notice and changes to this document since printing and other important information about the software productare made or published in release notes, and you are urged to obtain the current release notes for the software product. We welcome user comments and reserve the right to revise this publication and/or make improvements or changes to the productsor programs described in this publication at any time, without notice. The usage of any Epicor Software shall be pursuant to an Epicor end user license agreement and the performance of any consulting services by Epicor personnel shall be pursuantto the standard services terms and conditions of Epicor Software Corporation. Epicor, the Epicor logo, and Business Inspired are trademarks of Epicor Software Corporation, registered in the United States, certain other countries and/or the EU. Allother trademarks mentioned are the property of their respective owners. Copyright 2014 Epicor Software Corporation. All rights reserved.

Manage changes in production in a proactive way to minimize the impact of changes on the overall schedule. Increase the visibility of the entire production process so that the production schedule, materials management, current production operations, and quality are